The Toxic Lake Worth Trillions?

The Salton Sea

7:54

There's a toxic lake in the California desert that smells like rotten eggs, kills fish by the million, and gives children asthma at triple the national average. For decades, it was the kind of place you'd write off as an environmental catastrophe and move on.

Now it might be the most valuable piece of land in America.

The Salton Sea sits on top of one of the largest lithium deposits ever found in North America — enough for 375 million EV batteries, worth over half a trillion dollars. And the reason nobody's been talking about it until recently is that for 40 years, the companies operating there weren't mining anything. They were just pumping hot brine to generate electricity and throwing the lithium away as a disposable byproduct.

Batteries changed that. China now produces 80% of the world's lithium-ion batteries, and the United States has been scrambling to catch up. Suddenly that smelly lake in Imperial Valley doesn't look like a disaster zone. It looks like a strategic resource.

THE ACCIDENTAL LAKE

The Salton Sea shouldn't exist. The lakebed was bone dry for 500 years until 1905, when an irrigation canal from the Colorado River flooded and dumped the entire volume of the river into the desert for two years straight. 400 square miles of water appeared where none had been.

For a while, it was paradise. Bombay Beach became a resort town. Frank Sinatra and Bing Crosby came to vacation. Wildlife flourished. By the 1950s it was the Salton Riviera — golf, water skiing, one of the most diverse bird populations in the country.

Then the lake started dying. It has no outlet. Everything that flows in stays — agricultural runoff, fertilizer, pesticides, salt. Four million tons of salt accumulated every year. The water became twice as salty as the Pacific Ocean. Fish died by the millions. In 1996, 10,000 pelicans died of botulism in four months. The resort town emptied out.

By 1999, evaporation accelerated. 45 square miles of lakebed — the size of San Francisco — got exposed. The dust that blows off that lakebed is loaded with pesticides, arsenic, and factory emissions. Kids living within seven miles of the lake have lungs that grow slower. One in five children in the region has asthma. The Pacific Institute estimates $29 to $70 billion in damages if nothing changes. That's the place three companies are now fighting over.

WHAT'S UNDERNEATH

The Salton Sea sits in the Salton Trough — a rift zone where the Earth's crust is being pulled apart between the San Andreas Fault and the spreading center that created the Gulf of California. It's one of the most geologically active pieces of real estate in North America.

Geologists knew there was enormous geothermal potential beneath the surface since the 1950s. When they drilled test wells, they found some of the hottest geothermal fluids ever discovered in North America. They also found something frustrating: the brine was so salty and mineral-rich that it clogged pipes, corroded equipment, and made commercial development brutally difficult.

It took two decades before the first commercial geothermal plant opened in 1982. More followed. Today, the region hosts one of the largest geothermal complexes in the United States. For 40-plus years, those plants have been pumping lithium-rich brine to the surface every single day and throwing it away.

That was fine when lithium was a niche material. It's not fine anymore. Phones, laptops, EVs, AI data centers, grid-scale energy storage, drones, robotics — the entire push to electrify everything runs on batteries, and batteries run on lithium. The DOE estimated the Salton Sea region could contain enough lithium for over 375 million EV batteries.

You don't dig a mine. You don't blast rocks. You don't dump brine into evaporation ponds that take 18 months to work. The brine is already coming up. You just pull the lithium out while it's there.

THE ENGINEERING PROBLEM

Here's the catch, and it's the real story.

The brine is 600 degrees Fahrenheit. It's under enormous pressure. It's loaded with salt and minerals that corrode steel and clog filtration equipment with silica scaling. In a normal geothermal plant, you replace pipes every 10 years. At the Salton Sea, it might be every 18 months.

The lithium isn't the bottleneck. The geology is solved. The resource is confirmed. What's standing between the US and a domestic lithium supply is a few thousand feet of very hot pipe that keeps breaking.

That's the part of this story that connects to everything else I've been writing about. We keep talking about the AI race as a race for chips. It's increasingly a race for the physical inputs beneath the chips — power, copper, lithium, transformers, cooling, land, water. The Salton Sea is a geological accident that accidentally assembled several of those inputs in one place: geothermal power generation, lithium extraction, and a region that desperately needs both economic development and environmental remediation.

If commercial-scale extraction works, you're not just getting lithium. You're getting a vertically integrated industrial ecosystem: geothermal power feeds lithium extraction, lithium feeds battery materials, battery materials feed manufacturing, manufacturing feeds grid storage, grid storage feeds AI data center infrastructure. All of it sitting on top of a toxic lake that needs to be fixed anyway.

The problem that funds its own solution. That's the bet.

WHO'S PLAYING

Three companies are in the race. Berkshire Hathaway's BHE Renewables and Energy Source both have geothermal plants already operating. But the most promising hand belongs to Controlled Thermal Resources and their project called Hell's Kitchen — even without a commercial plant running yet.

The engineering challenge is real. The pipes need expensive nickel and titanium alloys. The plants cost billions to build. The technology for direct lithium extraction at commercial scale is still unproven. Local communities support the development but want guarantees that the promises are real, not just PR.

If the first commercial plants stay online through 2027, the road opens. If they can't keep the pipes from clogging, it stalls.

THE BIGGER PICTURE

The Salton Sea story isn't really about lithium. It's about a pattern that keeps repeating.

America has the resources. We have the geology, the land, the engineering talent, and the capital. What we keep missing is the middle layer — the unglamorous engineering and infrastructure work that turns a known resource into a producing asset. We're great at discovery and great at deploying capital. We're bad at the part in between: building the pipes, proving the process, running the facility for years without it falling apart.

The Salton Sea's lithium has been sitting there for decades. Everyone knew it was there. What changed wasn't the geology. What changed was the economics — batteries became the foundation of modern life, and suddenly a disposable byproduct became a strategic resource.

The question now isn't whether the lithium exists. It does. The question is whether anyone can run the pipes at 600 degrees, in corrosive brine, at commercial scale, without replacing half the facility every 18 months.

That's not a geology problem. It's an engineering problem. And engineering problems get solved when the economics are good enough to justify the cost of solving them.

Half a trillion dollars of lithium sitting under a toxic lake. The economics are good enough.

---

Ad: Use code: RICH99 for a discount

Rich Washburn is a technologist and strategist working at the intersection of AI, infrastructure, and capital. He is Managing Partner and Chief AI Officer at Eliakim Capital.